NZD/USD (current price: 0.7270)
The pair rocketed higher after the widely expected decision by the RBNZ to cut the benchmark interest rate to 2% from the previous 2.25%. The more hawkish monetary statement of the central bank led to a strong rally in the currency, as we expected, copying last week’s action in the Australian Dollar. The pair rose above the 0.7300 level that we have been monitoring recently after the decision, and further upside is possible if global risk appetite remains strong.
Our assessment: The cross broke out of relatively narrow range after the crucial RBNZ announcement, and the recent correction might be over following the break-out this morning.
